![]() ![]() ![]() An exclusion from income means that you won't have to pay income tax on the benefit you're receiving, but you also won't be able to use that same tax-free benefit for a deduction or credit.Certain savings plans allow the accumulated earnings to grow tax-free until money is taken out (known as a distribution), or allow the distribution to be tax-free, or both.A deduction reduces the amount of your income that is subject to tax, thus generally reducing the amount of tax you may have to pay.A tax credit reduces the amount of income tax you may have to pay.Tax credits, deductions and savings plans can help taxpayers with their expenses for higher education. ![]() Review the AOTC and Publication 519, U.S. There are additional requirements for foreign students and dependents who have an ITIN.You can use the IRS’s Interactive Tax Assistant tool to help determine if you’re eligible for educational credits or deductions, including the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). ![]()
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